Payday Lending

Big Banks Get Involved

KFTC member Jeff Hampton pointed out in a June 2011 letter to the editor, "The practices of Payday Lenders has become so lucrative that they are now being adopted by major financial institutions and banks." Jeff and the Center for Responsible Lending report that those banks include Fifth Third, US Bank and Regions, which operate in Kentucky, as well as Wells Fargo and Guaranty Bank.

Resources

The Debt Trap in the Commonwealth, a report by the Kentucky Coalition for Responsible Lending

The cap is needed as a solution to the problem of excessive interest rates charged by payday lenders, whose current method of charging interest can result in rates up to 400 percent a year.

Other states have already passed such caps and at similar or lower rates. Ohio caps the interest rate at 28 percent. Maryland capped interest rates at 33 percent and devised an alternative to this predatory practice – a Borrow and Save program that offers the poor low-cost loans between $300 and $1,000 at a rate of 7.99 percent.

It's time for Kentucky lawmakers to take similar action. So far, they have failed to pass bills introduced the last several legislative sessions.

Come and join Kentuckians For The Commonwealth as we invite candidates for Covington City Commission to hang out with voters in Covington! We hope you join us, and ask them about the issues you care about. We will have some information on who we at KFTC are, what we do, and the last chance to register to vote before the primary is over!